INDUS Holding AG's Strategic Investments and Share Buyback Program Show Promising Outlook

INDUS Holding AG, a German conglomerate, has recently completed a share repurchase program, in addition to making strategic acquisitions in infrastructure and AI-based industrial automation. From February 22 to March 1, INDUS repurchased 1.1 million shares at €23 each, representing around 4.09% of the company's capital, at a total cost of €25.3 million. This move is seen as a positive capital allocation decision due to the attractive return on investment capital it offers to the company.

The firm has expanded its portfolio by completing the acquisition of the remaining 50% stake in Hauff-Technik GRIDCOM, strengthening their infrastructure network portfolio. This acquisition complements INDUS's holdings in Weigand Bau GmbH and Turmbau Steffens & Nölle GmbH, focusing on fiberoptic infrastructure components production. Furthermore, INDUS has acquired Gestalt Robotics GmbH, a company specializing in AI-based automation for industrial applications, marking a significant step into the rapidly growing AI market.

An attractive financial performance is highlighted by INDUS's preliminary FY23 free cash flow (FCF), which significantly exceeds the previous year's and the management's target. Additionally, the divestment of loss-making automotive-related business contributes to the company's strong FCF projection. With an attractive valuation at 4.3x EV/EBITDA for 2024e, below its 10-year historical average, and a reiterated BUY recommendation from NuWays AG analysts, INDUS remains poised for future growth.